Technology's Role in Meeting Short- and Long-Term U.S. Energy Needs

Abstract

Summary Technological innovations will continue to playa critical role in meeting both short- and long-term U.S. energy needs as "opportunity windows" open and close regularly-especially at the regional level. Market opportunities, particularly market niches, will continue to occur; however, the competition to exploit them will remain fierce, and, thus, careful analysis of technological, economic, regional, and policy factors will be essential. Introduction Even before the oil embargo of 1973–74, a great deal of R&D work around the world was being directed toward technology options that would alleviate the growing problem of dependency on a single source of energy - oil. South Africa was producing oil from coal, and significant resources were being committed in Europe to ensure that indigenous coal, in whatever form was needed, would be a long-term substitute for imported oil. The U.S., principally under the guidance of the Office of Coal Research, established several extensive programs for converting coal to petroleum and natural gas substitutes. In addition, private companies and the U.S. government, especially through the developing space program, had undertaken advanced R&D programs for producing electricity through solar power systems. Now that the oil crisis has ameliorated, demand patterns have changed. Moreover, additional petroleum supplies have been discovered. As a result, the perception is relatively widespread that the need for technological innovation in energy matters has lessened. Many governments, with their zeal for cost reduction, have left the matter of energy R&D commercialization in the hands of the private sector. Nevertheless, for those who have participated in the energy business for many years, the need for technological development and innovation to meet both short- and long-term national energy requirements remains as pressing as ever. The energy market that requires such technologies is now much more sophisticated, and system developers and users must understand the subtleties of that market in addressing systems' long-term needs. The role of technologies for the energy market can be divided into four areas:definition of needs and options,evaluation of technology for marketplace applications,the need for energy technological systems, andmarket opportunities for the application of energy technologies and systems. Technology Needs and Options There is no "need" for new technology in meeting short- or long-term energy requirements if the energy marketplace has no use for it. An objective evaluation of the needs for a technology or system, therefore, must include the assessment of two market elements.The "addressable" market is the potential size and nature of the market where a technology might be applied.The "actual" or "expected" marketis that share of the potential market that might be captured by a new technology. Existing technologies will continue to be used to recover and exploit energy supplies throughout the energy system until a new technology becomes competitive by meeting a market need. Fig. 1 shows the steps required to evaluate needs. Any analysis of technology's roles in meeting market requirements must include three independent analyses.Scenarios under which international conventional energy price is likely to be set must be assessed. The assessment includes evaluation of such items as economic growth, demographics, national need for indigenous fuel, production, OPEC actions, balance-of-payments issues, and all the remaining factors that help determine the likely range of future energy prices against which technologies must compete.National energy policies that determine the competitive position of technological systems within a country must be calculated. In the U.S., for example, analysis of the effect of state and local, as well as federal, involvement in pricing through taxation or subsidies would be necessary. Taken together, this evaluation and the scenario analysis would produce an energy balance for a country in terms of sectoral demand for energy over time.Technologies that might be applied to meeting both energy supply and demand within each sector of a country's energy economy must be evaluated critically. Each technology is screened against its competition; after a thorough application/performance analysis, the array of technologies that might meet industrial, electric power, consumer, or transportation needs can be quantified. Summing the applications for individual sectors then provides an indication of the total market potential for a technology. For example, a summation of the likely need for systems that produce low-Btu gas from coal for use in electric power generation or as industrial fuel - its two applicable sectors - would quantify the need for such a technology over time.